Defined methods to grow replicative cultures of normal human bronchial epithelial (NHBE) cells without serum have been developed. These cells can be subcultured several times, will undergo 35 population doublings, and have expected epithelial cell characterisitics of keratin, desmosomes, and blood group antigens on their cell surface. NHBE cells inoculated at clonal density will multiply with an average generation time of 28 hr, and the majority of the cells are small, migratory, and have few tonofilaments. Adding human blood-derived serum (BDS) depresses the clonal growth rate of lNHBE cells in a dose-dependent fashion. In contrast, 10 representative lines of human lung carcinomas either replicate poorly or fail to grow at all when inoculated at clonal density in serum-free medium; their rates of multiplication increase in direct proportion to the amount of BDS added to the optimized medium. BDS reduces the clonal growth rate of NHBE cells by specifically inducing the normal cells, but not lung carcinoma cells, to undergo squamous differentiation. The differentiation inducing activity was not present in plasma but was found in platelet lysates. In vitro carcinogenesis experiments with normal bronchial epithelial tissue and cell cultures have yuielded populations of cells that have abnormal characteristics. These phenotypically altered cells (PACs), which have keratin epithelial cell markers, extended population doubling potentials, abnormal human karyologies and abnormal response to differentiation control by serum and platelet factors.